Smith v Huertas [2015] EWHC 3745 (Comm)

Case No CL-2014-000114

[2015] EWHC 3745 (Comm)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

COMMERCIAL COURT

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 21/12/2015

Before

MR JUSTICE COOKE

Between

Dr Richard Barry SmithClaimant

Xavier HuertasDefendant

(as administrateur judiciaire et commissaire a l’execution du plan mandataire ad hoc a la procédure de redressement judiciaire of Valorum SA)

Mr C. Samek QC and Mr J. Mehrzad (instructed by Magrath LLP) for Claimant

Mr H. Mercer QC (instructed by Boodle Hatfield LLP) for Defendant

Hearing Hearing dates: 15th and 21st December 2015

Judgment

Introduction

[1]The claimant (Dr Smith) seeks a declaration in this action that the defendant (Mr Huertas) is not entitled to have the judgment of the Cour d’Appel d’Aix-en-Provence of 26th March 2013 (the APCA Judgment) recognised or enforced pursuant to the provisions of the Judgments Regulation on the grounds referred to in Article 34.1, namely that such recognition and/or enforcement would be manifestly contrary to public policy. In the same action Mr Huertas applies for summary judgment, seeking a declaration to the contrary effect on the basis that Dr Smith’s claim has no realistic prospect of success.

[2]Dr Smith recognises in his skeleton that under Article 36 of the Judgments Regulation:

“Under no circumstances may a foreign judgment be reviewed as to its substance.”

It is accepted that the only basis for challenge to the APCA Judgment of 26th March 2013 is provided by Article 34(1) of the Judgments Regulation:

“A judgment shall not be recognised … if such recognition is manifestly contrary to public policy in the Member State in which recognition is sought.”

[3]Large elements of Dr Smith’s witness statements and the expert evidence from French lawyers that he adduced were however directed to a particular finding in the APCA Judgment which corresponded with an earlier decision of that Court on 26th October 2006 (which was cited) that the date of insolvency or Cessation de Paiements (CDP), was 12th May 2008. The APCA Judgment contained additional reasoning of its own in this respect and went on to state in terms that the CDP date was not critical to the findings made against Dr Smith in relation to the criminal offence of which he was convicted and which gave rise to the compensatory award which is the subject of disputed recognition and enforcement here. It seemed to me at the outset on reading the skeletons, pleadings and evidence, that absent a challenge to the impartiality of the APCA, the ACPA Judgment was likely to be unchallengeable because of the terms of Article 36. Alleged failures in the fairness of the process could impact on this but might well be insufficient to justify a refusal to recognise the Judgment unless so gross as to be offensive to public policy.

[4]The relevant part of the APCA judgment reads as follows:

“THE CHARGE SMITH, Richard Barry is accused: of having in VALBONNE, PARIS, from 01/04/1998 to 21/12/1998, in any event on national territory and for a time not covered by the statute of limitations, being de facto or de jure director of a private corporate entity subject to court-ordered liquidation receivership committed the offence of fraudulent bankruptcy or misappropriating or concealing all or some of the assets, in this instance by diverting funds owing to SA VALORUM to the benefit of PHARMAKOPIUS INTERNATIONAL, and by transferring without any consideration to VALORUM LTD (PHARMAKOPIUS EUROPE LTD) furniture belonging to SA VALORUM, … With regard to the involvement of Richard SMITH: 1. with regard to the transfers of funds from the parent company to two subsidiaries of the former PHARMAKOPIUS international group Through ruling of 26 October 2006 the Court of Appeal of Aix-en-Provence fixed at 12 May 998 the date on which FDMPHARMA was found in a situation of insolvency under the terms of the following reasoning: … In fact the objective signs of the insolvency of the company appeared in the weeks following the capital increase: … Thus, from the end of the first half of 1998, in spite of fund raising of 140,000,000 francs carried out three months earlier, the situation of the company, which no longer had the necessary funds to finance a restructuring that was now imperative, was irremediably compromised. In any event, the argument according to which the transfer of funds set out in the charge in reality took place prior to the state of insolvency is not relevant to the establishment of the offence of fraudulent bankruptcy insofar as, coming from a same intention and striving for the same aim, they had the effect of affecting the content of the available assets under conditions likely to make the company unable to address the current liabilities. The existence of a causal link between the transfers of funds set out in the charge and the state of the insolvency of the company suffices to establish the offence of fraudulent bankruptcy. Furthermore, and contrary to what he would have us believe, Richard SMITH was fully aware of the date of the three transfers of funds that FDMPHARMA was in a state of insolvency.”

SMITH, Richard Barry is accused:

With regard to the involvement of Richard SMITH:

[5]Counsel for Dr Smith recognised that he needed to show a breach of Dr Smith’s Article 6 rights to a fair trial or such breach of natural justice that, as a matter of public policy, this Court ought not to enforce the judgment. He submitted that recognition and enforcement “would be at variance to an unacceptable degree with the legal order of the State in which enforcement is sought, inasmuch as it would infringe a fundamental principle – a manifest breach of a rule of law regarded as essential in the legal order of the State in which enforcement was sought or the right recognised as being fundamental with that order”.

The grounds of challenge

[6]Dr Smith contends that the judgment should not be recognised and that he is entitled to the relief he seeks because: i) The criminal proceedings against him, including the partie civile element were contrary to Article 6.1 and/or 6.3 of the European Convention on Human Rights and/or a breach of natural justice under English law; and/or ii) The criminal courts (i.e. the Tribunal Correctionnel de Grasse (TCG)) which was the first instance court and the APCA were guilty of actual or apparent bias against Dr Smith.

[7]Article 6.1 of the ECHR provides that:

“In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.”

Article 6.3 provides:

“Everyone charged with a criminal offence has the right[s]: .. (e) to have the free assistance of an interpreter if he cannot understand or speak the language used in court.” (e) to have the free assistance of an interpreter if he cannot understand or speak the language used in court.”

[8]It was submitted that the public policy ground may successfully be invoked even where there are on the face of it available remedies in the State of origin where, on the facts, the guarantees laid down in the legislation of the State of origin and in the ECHR itself have been insufficient to protect the party from a manifest breach of a relevant human right.

[9]In summarising his position in his first witness statement, Dr Smith stated that it was only with an appreciation of the key background facts that the Court could see the inappropriateness of the allegations which Mr Huertas first contrived and then maintained against him, his irrational bias against himself and a co-defendant and the effect of his machinations in terms of depriving him and his French lawyers of information at key stages of the legal process and on one occasion actively misleading the French court. Only then could the injustice done to him be appreciated as a result of the procedural unfairness practised upon him in the courts in France. He maintained that it would not be fair to say that the background facts were irrelevant or seek to stigmatise or ignore them by characterising any consideration as an attempt to review factual findings of the French civil and criminal courts. He maintained that it was “the procedural unfairness I have been subjected to by French Authorities over the course of 16 years which has given rise to an exceptional matrix of facts which the Court must now recognise gave rise to a judgment in 2013 which is not only perverse, but, if enforced, would be manifestly contrary to public policy in the United Kingdom.”

[10]So it is that Dr Smith relies upon the findings against him by the French court to support his allegations of procedural unfairness and bias. This presents the obvious problem that he seeks the English court’s review of the substance of the French court’s judgments. In any event, as those judgments are reasoned, much more would be required to show bias, than simply the conclusions, unless those conclusions of fact and law were so obviously perverse as to constitute evidence of unfairness which they are not.

[11]It is necessary to set out in extenso the terms of paragraphs 68 and 69 of the Particulars of Claim because they detail the complaints made by Dr Smith. Paragraph 68 is pleaded in support of the contention that the criminal proceedings as a whole, alternatively the appeal before the APCA, were unfair and contrary to

Article 6(1) of the ECHR

and/or in breach of natural justice, whilst paragraph 69 is pleaded in support of the allegation that the TCG and/or APCA were guilty of bias (actual or apparent) towards the claimant in the proceedings. Paragraphs 68 and 69 read as follows:

“68. The criminal (including partie civile) proceedings as a whole, alternatively the appeal before the APCA resulting in the Aix judgment were unfair contrary to Art. 6.1 of the European Convention on Human Rights and/or a breach of natural justice fur the following reasons: a. The criminal investigation and proceedings against the Claimant lasted an inordinate and excessive period of time: the criminal investigation started on 25.8.99 and he was convicted by the TCG on 9.7.12 and APCA on 26.3.13. It was unfair that the Claimant should have been subject to investigation and to the proceedings for so long and subject to bail conditions of £300.000 during the entire criminal investigation. b. It was unfair for the JI not to have interviewed the Claimant and to have refused his said requests for interview. The Claimant was thereby prevented from putting his side of the case at an early stage of the process against him. c. The JI’s recommendation that criminal charges be brought was irrational and/or perverse in that (in addition to sub-paragraphs a. and b. above): i. In relation to charge 1: 1. there was no or no sufficient evidence to support the proposition that Valorum was in CDP on any date earlier than that that formally declared by Adams, namely 1.12.98; and/or, 2. the JI’s conclusion that Valorum was in CDP on 12.5.98 was based solely on the 26.10.06 APCA judgment which itself was misconceived and invalid for the reasons set out in paragraphs 31 and 32 above; and/or 3. there was no investigation conducted by the JI at all into whether Valorum was in CPD on 12.5.98 or any date earlier than 1.12.98. ii. In relation to charge 2, the interest accrued on the said £1.8m loan had in fact been repaid by way of deduction from the cash consideration paid at stage I of the completion of the purchase of the shares in P1. iii. There was no evidence at all to support charge 3. d. The criminal proceedings were irremediably tainted and prejudiced by the Defendant’s dishonest concealment of the said repayment of £468,457 as pleaded in paragraphs 57 - 60 above since it was the Defendant who had instigated the investigation against the Claimant; who had claimed in partie civile and thus stood to benefit from them; and who allowed the TCG to convict the Claimant, and award the Defendant monies, in respect of the said repayment of £468.457. As soon as it was brought to the attention of the APCA that the TCG had convicted the Claimant and awarded the Defendant in respect of the said repaid monies in circumstances where the same was brought about entirely through the Defendant’s was wholly improper and dishonest concealment of the said repayment, it ought to have dismissed the charges and the Defendant’s partie civile proceedings. Unfairly it did not. e. The criminal proceedings were also irremediably tainted and prejudiced by: i. the Defendant’s private communications with the Claimant’s co-accused Adams: namely his letter dated 29.8.08. It wholly improper for the Defendant to have acted in such way and as soon as it was brought to the attention of the APCA that the Defendant had so acted, it ought to have dismissed the charges and partie civile proceedings. Unfairly, it did not; and/or ii. the Defendants attorney, Maître Michel Montagard, having contacted Adams by telephone on a date presently unknown to the Claimant but prior to the criminal trial in the TCG with a view to obtaining Adams’ help to find a work placement for his son in England. In fact, at the hearing in the TCG Maître Montagard strongly submitted to the court that the Defendant’s real complaint was not against Adams. In the event, Adams was acquitted, even though he had been Valorum’s CFO and Finance Director at all material times, had been the president of FDM between February and 3.4.98 and whose advice it had been to pay the said £1.8 million to FDM UK Limited. In this regard, the inference to he drawn from the foregoing is that that the judges of the TCG were improperly susceptible to the said submission made by Maître Montagard: there was no or no proper reason for the TCG to have distinguished between the Claimant and Adams. Both should have stood or fallen together in relation to the said criminal charges. f. The conduct itself of the 23.3.13 APCA hearing was arbitrary, demeaning to the Claimant, intimidating and unfair for the following reasons: i. Questions were put to the Claimant at the start of the hearing. The Claimant’s response to the first question was inaccurately and inadequately translated and the translator was wholly unable properly to translate the Claimant’s responses to the other two questions put to the Claimant. Thereafter, his counsel was afforded only very limited time, 20 minutes, to address the APCA. That was a wholly inadequate length of time in relation to the criminal proceedings against the Claimant, especially also having regard to the nature of the charges, the amounts at stake and the potential punishment (including possible loss of liberty). ii. Moreover, the Claimant was further prejudiced in the said hearing because; (1) his evidence had to be given through an interpreter; and (2) the interpretation was inadequate; and, (3) the court repeatedly interrupted the Claimant. iii. The interpreter, who had been provided by the court, was inadequate, which was specifically a breach of Art. 6.3 of the European Convention of Human Rights. iv. The president of the APCA was openly hostile to the Claimant: she shouted at him when he addressed the Court and repeatedly talked over him. There was no good reason whatsoever for the president to have acted in such an inappropriate and unjudicial way. v. Immediately prior to the start of the hearing, the president of the APCA handed the Claimant’s lawyers a copy of a letter dated I7.8.12 which he had written to the French Minister of Justice (and others) in which he had raised complaints about the criminal investigation and process to which he had been subject. The letter was handed to the lawyers by the president without comment or any word. The inference to be drawn is that by her actions, the president intended, wholly improperly for a supposed impartial tribunal, to convey the following messages to the Claimant, namely that: 1. in her opinion, it was wholly wrong and improper and insulting to the French judicial process for the Claimant to have written and sent the said letter; and/or 2. there would be adverse consequences for the Claimant in the APCA by reason of his having written and sent the said letter. g. Neither the TCG nor the APCA conducted any inquiry into the critical issue of whether Valorum was in CDP on 12.5.98 or indeed at any point in time before 1. 12.98. The TCG and the APCA fell into the same errors as those of the APCA when arriving at the APCA 26.l0.06 judgment, as pleaded in paragraphs 27 - 32 above. Further, such matters as the APCA purported in its 23.3.13 judgment to rely on in relation to the CDP date were in fact irrelevant because none of them (whether taken singly or in conjunction with others) disclosed whether as at 12.5.98 or at any point in time before 1.12.98 Valorum was able to discharge from its available assets its debts as they fell due. h. The TCG and the APCA both ignored and failed to have any regard at all to the following matters referred to in sub-sub-paragraphs i – x below, which were not only material to the determination of the date of CDP and of which a fair and impartial tribunal would have taken account but which also would have caused any fair and impartial tribunal to have concluded that the date of CPD was not 12.5.98 or any date other than 1.12.98. i. The fact that nothing in the Salustro report supported the conclusion or inference that Valorum was in CPD as at 12.5.98 or a date other than 1.12.98. The Claimant refers to paragraph 31 above. ii. The fact that at the commencement of the administration on 7.12.98, Valorum was up to date with its tax and national insurance payments, did not have any debts registered against it, was not the subject of any debt recovery proceeding, injunctions or payment demands and had paid all salaries due to its employees. iii. The fact that the only financial evidence relied on by the APCA was Valorum’s accounts for the first semester of 1998 (prepared by its auditors on 13.10.98). Whilst those accounts showed a decreasing turnover and net loss of FF 83 million, they did not show or establish that Valorum was in CDP on 12.5.98 or on any date other than 1.12.98. iv. The fact that on 29.7.98, independent international chartered accountants Moore Stephens had been engaged to review the state of Valorum’s solvency and had carried out an audit of Valorum’s finances but did not report that it was in CDP. They noted that according to Valorum’s projections, cash would run out in September or October 1998. They also confirmed that they had been provided with all the information requested. Further, they prepared a restated balance sheet for Valorum as at 31.5.98 which showed net assets of FF 226.lm. v. The fact that Valorum’s board of directors (including the Claimant and Adams) had been provided with weekly financial reports, reviewed by Moore Stephens, which did not indicate that Valorum was in CDP. vi. A memo dated 9.9.98 prepared by Adams for the board based on legal advice. vii. The fact that on 20.11.98, another accountant Kevin Allen had provided the board with a memo in respect of the September 1998 accounts and Valorum’s solvency. He had attached a balance sheet as at 30.9.98 together with a consolidated profit and loss account for the nine months ending on that date. He had specifically considered the question whether the Valorum group was insolvent and had concluded that if the provision for restructuring was removed because the company could not afford it), the Valorum group’s assets as at 30.9.98 exceeded its liabilities by FF 15.8 million. He had also concluded that if losses continued at the same rate, liabilities would not exceed assets until some time in February 1999. Moreover, he had also prepared a company by company balance sheet as at 30.9.98 which showed that Valorum had total net assets of FF 81.9 million. viii. On 10.11.98, Valorum’s employee Duncan McDiarmid, whose job it was to prepare cash flow forecasts, had sent a forecast for the week commencing on 9.11.98 to the board. In that forecast he had concluded that Valorum would run out of cash in the following week if money was not transferred from the UK. He had stated that FF6.2 million was available in the UK on a weekly deposit account with Lloyds Bunk and a decision needed to he taken by Friday of that week as to whether FF 3 million ought to be transferred to Valorum. Based on such advice, the Claimant had procured that a total of FF 6 million was sent from FDM UK Limited to Valorum by two payments made on 12.11.98 and 19.11.98; those monies were and had been available as working capital for Valorum (as parent company) until the UK subsidiaries went into receivership on 27.11.98. In that regard, the liquidator of the English subsidiaries had and has not at any time challenged the transfers made to Valorum, and in fact he made the further repayments to the Defendant (as referred to in paragraph 57 above. ix. The fact that in August 1998, a third party PRA Inc had confirmed in writing an offer of FF 50 million in the form of a loan for restructuring costs and moreover in November 1998 another third party Alchemy Partners (VC) also confirmed in writing terms for a loan of up to FF 55 million also for the said restructuring costs. Thus, the Claimant (and FDM’s other directors) reasonably believed that recovery was viable. In the event, the restructuring proved impossible only by reason the refusal of Valorum’s French employees to accept the terms of the proposed “social plan” (redundancy terms). x. The fact that Valorum did not run out of cash until December 1998, and for that reason Adams had declared that Valorum was in CDP on 1.12.98. i. Neither the TCG nor the APCA conducted any or any proper judicial assessment of the Defendant’s claim in the partie civile proceedings and/or of the basis for the Claimant’s liability to the Defendant including in the amounts claimed and in fact awarded and/or they gave no or no proper reasons for the same. In this regard, the Claimant will rely on the following as evidence of the same: i. The fact that the TCG convicted the Claimant (and Ms. Smithdale) under charge 3 when there was no evidence whatsoever to justify such conviction or make an award to the Defendant in respect of the same. ii. The fact that the APCA convicted the Claimant under charge 2 and made an award to the Defendant in respect of the same, notwithstanding (as pleaded in paragraph 12 above) contemporaneous evidence which showed that the said interest had been repaid by a deduction from the stage I cash payment, and (ii) a letter from FDM dated 12.6.98 confirming that “all liabilities and obligations” in respect of the said £1.8 million had been “satisfied in full”. j. Following his arrest on 1.12.99 by the French police and his detention in police custody, the Claimant’s rights under Article 6 ECHR were infringed in the following ways: i. he was not notified during his custody of his right to remain silent; ii. he was not notified during his custody of his right not to incriminate himself; iii. he was interviewed on 1.12.99 without having had or having the assistance of a lawyer of his choice; iv. he was interviewed on 1.12.99 without having been advised by a lawyer of his choice regarding the content of the minutes purporting to record his police interview which he was asked to sign; and v. he was required by a police officer on 1.12.99 and 2.12.99 to swear an oath that he would tell the truth during his police questioning and was thereby subjected to a form of improper pressure; further the threat of criminal proceedings (as provided for by Art. 434-13 of the French Criminal Code) placed him under yet further improper pressure. 69. The TCG and/or APCA was guilty of bias (actual or apparent) towards the Claimant in the criminal (including partie civileproceedings) proceedings. The Claimant relies on the following as evidence of the same and/or as matters from which the inference of bias is to be drawn: a. The Claimant relies on the facts and matters set in sub-paragraph 68.f above. b. The Claimant relies on the facts and matters set out in sub-paragraph 68.g above. The inference to be drawn from the fact that the APCA (i) relied on its said earlier decision notwithstanding the defects in it which had been brought to its attention and (ii) explicitly failed (as on 26.10.06) to conduct the fact-specific inquiry as to whether Valorum’s available assets were as at 12.5.98 sufficient to pay its debts which were then immediately payable, is that the APCA was biased against the Claimant. c. The Claimant relies on the facts and matters set out in sub-paragraph 68.h above. Specifically, the inference to be drawn from the failure to have had regard to such matters which were so obviously material to the determination of the issue of the date of the CDP is that the TCG and APCA were biased. d. The Claimant relies on the facts and matters set out in sub-paragraph 0 above. Specifically, the inference to be drawn from the failure to have had regard to such matters which were so obviously material to the determination of the issue of the date of the CDP is that the TCG and APCA were biased. e. As referred to in sub-paragraph 68.e.ii above, there was no or no proper reason for the TCG to have distinguished between the Claimant and Adams: both should have stood or fallen together. Without prejudice to sub-paragraph 68.e.ii above, the inference to be drawn from the fact that Adams was acquitted and the Claimant was not is that the TCG was biased against the Claimant. If Adams was acquitted, then the Claimant should also have been acquitted. f. The IC convicted the Claimant (and Ms Smithdale) in relation to charge 3 even though, as the APCA itself was compelled to admit, there was no evidence whatsoever to support the charge. g. As referred to in paragraph 64 above, the APCA increased the Claimant’s sentence upon his conviction when there was no basis whatsoever for such increase especially having regard to the fact that he had been acquitted of charge 3 and that the value of the monies the subject of charge 1 had been substantially reduced on account of the said repayment of £468,457 which had been dishonestly concealed by the Defendant. The only matter relied on by the APCA as purportedly justifying such increase in sentence his “character”

. Moreover, the APCA convicted the Claimant under charge which the TCG had not done. f. [sic] The APCA’s rejection of an application by the Claimant for a reference to the cour de cassation on the issue whether the gross delay in bringing the criminal proceedings against the Claimant was unconstitutional (as referred to in paragraph 53 above).” a. The criminal investigation and proceedings against the Claimant lasted an inordinate and excessive period of time: the criminal investigation started on 25.8.99 and he was convicted by the TCG on 9.7.12 and APCA on 26.3.13. It was unfair that the Claimant should have been subject to investigation and to the proceedings for so long and subject to bail conditions of £300.000 during the entire criminal investigation. b. It was unfair for the JI not to have interviewed the Claimant and to have refused his said requests for interview. The Claimant was thereby prevented from putting his side of the case at an early stage of the process against him. c. The JI’s recommendation that criminal charges be brought was irrational and/or perverse in that (in addition to sub-paragraphs a. and b. above): i. In relation to charge 1: 1. there was no or no sufficient evidence to support the proposition that Valorum was in CDP on any date earlier than that that formally declared by Adams, namely 1.12.98; and/or, 2. the JI’s conclusion that Valorum was in CDP on 12.5.98 was based solely on the 26.10.06 APCA judgment which itself was misconceived and invalid for the reasons set out in paragraphs 31 and 32 above; and/or 3. there was no investigation conducted by the JI at all into whether Valorum was in CPD on 12.5.98 or any date earlier than 1.12.98. ii. In relation to charge 2, the interest accrued on the said £1.8m loan had in fact been repaid by way of deduction from the cash consideration paid at stage I of the completion of the purchase of the shares in P1. iii. There was no evidence at all to support charge 3. i. the Defendant’s private communications with the Claimant’s co-accused Adams: namely his letter dated 29.8.08. It wholly improper for the Defendant to have acted in such way and as soon as it was brought to the attention of the APCA that the Defendant had so acted, it ought to have dismissed the charges and partie civile proceedings. Unfairly, it did not; and/or ii. the Defendants attorney, Maître Michel Montagard, having contacted Adams by telephone on a date presently unknown to the Claimant but prior to the criminal trial in the TCG with a view to obtaining Adams’ help to find a work placement for his son in England. In fact, at the hearing in the TCG Maître Montagard strongly submitted to the court that the Defendant’s real complaint was not against Adams. In the event, Adams was acquitted, even though he had been Valorum’s CFO and Finance Director at all material times, had been the president of FDM between February and 3.4.98 and whose advice it had been to pay the said £1.8 million to FDM UK Limited. In this regard, the inference to he drawn from the foregoing is that that the judges of the TCG were improperly susceptible to the said submission made by Maître Montagard: there was no or no proper reason for the TCG to have distinguished between the Claimant and Adams. Both should have stood or fallen together in relation to the said criminal charges. i. Questions were put to the Claimant at the start of the hearing. The Claimant’s response to the first question was inaccurately and inadequately translated and the translator was wholly unable properly to translate the Claimant’s responses to the other two questions put to the Claimant. Thereafter, his counsel was afforded only very limited time, 20 minutes, to address the APCA. That was a wholly inadequate length of time in relation to the criminal proceedings against the Claimant, especially also having regard to the nature of the charges, the amounts at stake and the potential punishment (including possible loss of liberty). ii. Moreover, the Claimant was further prejudiced in the said hearing because; (1) his evidence had to be given through an interpreter; and (2) the interpretation was inadequate; and, (3) the court repeatedly interrupted the Claimant. iii. The interpreter, who had been provided by the court, was inadequate, which was specifically a breach of Art. 6.3 of the European Convention of Human Rights. iv. The president of the APCA was openly hostile to the Claimant: she shouted at him when he addressed the Court and repeatedly talked over him. There was no good reason whatsoever for the president to have acted in such an inappropriate and unjudicial way. v. Immediately prior to the start of the hearing, the president of the APCA handed the Claimant’s lawyers a copy of a letter dated I7.8.12 which he had written to the French Minister of Justice (and others) in which he had raised complaints about the criminal investigation and process to which he had been subject. The letter was handed to the lawyers by the president without comment or any word. The inference to be drawn is that by her actions, the president intended, wholly improperly for a supposed impartial tribunal, to convey the following messages to the Claimant, namely that: 1. in her opinion, it was wholly wrong and improper and insulting to the French judicial process for the Claimant to have written and sent the said letter; and/or 2. there would be adverse consequences for the Claimant in the APCA by reason of his having written and sent the said letter. i. The fact that nothing in the Salustro report supported the conclusion or inference that Valorum was in CPD as at 12.5.98 or a date other than 1.12.98. The Claimant refers to paragraph 31 above. ii. The fact that at the commencement of the administration on 7.12.98, Valorum was up to date with its tax and national insurance payments, did not have any debts registered against it, was not the subject of any debt recovery proceeding, injunctions or payment demands and had paid all salaries due to its employees. iii. The fact that the only financial evidence relied on by the APCA was Valorum’s accounts for the first semester of 1998 (prepared by its auditors on 13.10.98). Whilst those accounts showed a decreasing turnover and net loss of FF 83 million, they did not show or establish that Valorum was in CDP on 12.5.98 or on any date other than 1.12.98. iv. The fact that on 29.7.98, independent international chartered accountants Moore Stephens had been engaged to review the state of Valorum’s solvency and had carried out an audit of Valorum’s finances but did not report that it was in CDP. They noted that according to Valorum’s projections, cash would run out in September or October 1998. They also confirmed that they had been provided with all the information requested. Further, they prepared a restated balance sheet for Valorum as at 31.5.98 which showed net assets of FF 226.lm. v. The fact that Valorum’s board of directors (including the Claimant and Adams) had been provided with weekly financial reports, reviewed by Moore Stephens, which did not indicate that Valorum was in CDP. vi. A memo dated 9.9.98 prepared by Adams for the board based on legal advice. vii. The fact that on 20.11.98, another accountant Kevin Allen had provided the board with a memo in respect of the September 1998 accounts and Valorum’s solvency. He had attached a balance sheet as at 30.9.98 together with a consolidated profit and loss account for the nine months ending on that date. He had specifically considered the question whether the Valorum group was insolvent and had concluded that if the provision for restructuring was removed because the company could not afford it), the Valorum group’s assets as at 30.9.98 exceeded its liabilities by FF 15.8 million. He had also concluded that if losses continued at the same rate, liabilities would not exceed assets until some time in February 1999. Moreover, he had also prepared a company by company balance sheet as at 30.9.98 which showed that Valorum had total net assets of FF 81.9 million. viii. On 10.11.98, Valorum’s employee Duncan McDiarmid, whose job it was to prepare cash flow forecasts, had sent a forecast for the week commencing on 9.11.98 to the board. In that forecast he had concluded that Valorum would run out of cash in the following week if money was not transferred from the UK. He had stated that FF6.2 million was available in the UK on a weekly deposit account with Lloyds Bunk and a decision needed to he taken by Friday of that week as to whether FF 3 million ought to be transferred to Valorum. Based on such advice, the Claimant had procured that a total of FF 6 million was sent from FDM UK Limited to Valorum by two payments made on 12.11.98 and 19.11.98; those monies were and had been available as working capital for Valorum (as parent company) until the UK subsidiaries went into receivership on 27.11.98. In that regard, the liquidator of the English subsidiaries had and has not at any time challenged the transfers made to Valorum, and in fact he made the further repayments to the Defendant (as referred to in paragraph 57 above. ix. The fact that in August 1998, a third party PRA Inc had confirmed in writing an offer of FF 50 million in the form of a loan for restructuring costs and moreover in November 1998 another third party Alchemy Partners (VC) also confirmed in writing terms for a loan of up to FF 55 million also for the said restructuring costs. Thus, the Claimant (and FDM’s other directors) reasonably believed that recovery was viable. In the event, the restructuring proved impossible only by reason the refusal of Valorum’s French employees to accept the terms of the proposed “social plan” (redundancy terms). x. The fact that Valorum did not run out of cash until December 1998, and for that reason Adams had declared that Valorum was in CDP on 1.12.98. i. Neither the TCG nor the APCA conducted any or any proper judicial assessment of the Defendant’s claim in the partie civile proceedings and/or of the basis for the Claimant’s liability to the Defendant including in the amounts claimed and in fact awarded and/or they gave no or no proper reasons for the same. In this regard, the Claimant will rely on the following as evidence of the same: i. The fact that the TCG convicted the Claimant (and Ms. Smithdale) under charge 3 when there was no evidence whatsoever to justify such conviction or make an award to the Defendant in respect of the same. ii. The fact that the APCA convicted the Claimant under charge 2 and made an award to the Defendant in respect of the same, notwithstanding (as pleaded in paragraph 12 above) contemporaneous evidence which showed that the said interest had been repaid by a deduction from the stage I cash payment, and (ii) a letter from FDM dated 12.6.98 confirming that “all liabilities and obligations” in respect of the said £1.8 million had been “satisfied in full”. j. Following his arrest on 1.12.99 by the French police and his detention in police custody, the Claimant’s rights under

Article 6 ECHR

were infringed in the following ways: i. he was not notified during his custody of his right to remain silent; ii. he was not notified during his custody of his right not to incriminate himself; iii. he was interviewed on 1.12.99 without having had or having the assistance of a lawyer of his choice; iv. he was interviewed on 1.12.99 without having been advised by a lawyer of his choice regarding the content of the minutes purporting to record his police interview which he was asked to sign; and v. he was required by a police officer on 1.12.99 and 2.12.99 to swear an oath that he would tell the truth during his police questioning and was thereby subjected to a form of improper pressure; further the threat of criminal proceedings (as provided for by Art. 434-13 of the French Criminal Code) placed him under yet further improper pressure. a. The Claimant relies on the facts and matters set in sub-paragraph 68.f above. b. The Claimant relies on the facts and matters set out in sub-paragraph 68.g above. The inference to be drawn from the fact that the APCA (i) relied on its said earlier decision notwithstanding the defects in it which had been brought to its attention and (ii) explicitly failed (as on 26.10.06) to conduct the fact-specific inquiry as to whether Valorum’s available assets were as at 12.5.98 sufficient to pay its debts which were then immediately payable, is that the APCA was biased against the Claimant. c. The Claimant relies on the facts and matters set out in sub-paragraph 68.h above. Specifically, the inference to be drawn from the failure to have had regard to such matters which were so obviously material to the determination of the issue of the date of the CDP is that the TCG and APCA were biased. d. The Claimant relies on the facts and matters set out in sub-paragraph 0 above. Specifically, the inference to be drawn from the failure to have had regard to such matters which were so obviously material to the determination of the issue of the date of the CDP is that the TCG and APCA were biased. e. As referred to in sub-paragraph 68.e.ii above, there was no or no proper reason for the TCG to have distinguished between the Claimant and Adams: both should have stood or fallen together. Without prejudice to sub-paragraph 68.e.ii above, the inference to be drawn from the fact that Adams was acquitted and the Claimant was not is that the TCG was biased against the Claimant. If Adams was acquitted, then the Claimant should also have been acquitted. f. The IC convicted the Claimant (and Ms Smithdale) in relation to charge 3 even though, as the APCA itself was compelled to admit, there was no evidence whatsoever to support the charge. g. As referred to in paragraph 64 above, the APCA increased the Claimant’s sentence upon his conviction when there was no basis whatsoever for such increase especially having regard to the fact that he had been acquitted of charge 3 and that the value of the monies the subject of charge 1 had been substantially reduced on account of the said repayment of £468,457 which had been dishonestly concealed by the Defendant. The only matter relied on by the APCA as purportedly justifying such increase in sentence his “character”. Moreover, the APCA convicted the Claimant under charge which the TCG had not done. f. [sic] The APCA’s rejection of an application by the Claimant for a reference to the cour de cassation on the issue whether the gross delay in bringing the criminal proceedings against the Claimant was unconstitutional (as referred to in paragraph 53 above).”

The law

[12]Counsel for Mr Huertas, Mr Mercer QC, submitted that the correct approach in law could be summed up in the following principles: i) Under no circumstances may a foreign judgment be reviewed as to its substance; ii) The foundation of mutual recognition of judgments in the EU is mutual trust in the judicial systems of other Member States; iii) The phrase “manifestly contrary to public policy” requires it to be established that there has been a flagrant breach of fundamental rights; iv) If the person relying on fundamental rights has or had remedies in the state of origin of the judgment, he should normally be left to those remedies; v) An English court should not normally entertain a challenge to a Convention judgment in circumstances where it would not permit a challenge to an English judgment.

[13]By reference to recitals 2, 6 and 16-18 of the Regulation, he submitted that rapid and simple recognition and enforcement of judgments in Convention countries was regarded as essential, that the objective was the free movement of judgments in both civil and commercial matters and that such free movement was achievable only by applying the principle of mutual trust to judgments of other member states. In connection with the issue of trust and confidence, he cited the well-known dictum in Case 116-02, commonly referred to simply as Gasser:

“Second, it must be borne in mind that the Brussels Convention is necessarily based on the trust which the Contracting States accord to each other’s legal systems and judicial institutions. It is that mutual trust which has enabled a compulsory system of jurisdiction to be established, which all the courts within the purview of the Convention are required to respect, and as a corollary the waiver by those States of the right to apply their internal rules on recognition and enforcement of foreign judgments in favour of a simplified mechanism for the recognition and enforcement of judgments.”

[14]I was referred to four other authorities in support of the propositions put forward on Mr Huertas’ behalf. The first of these was Case 7/98 Krombach v Bamberski where the court observed at paragraph 19 that the Convention (the predecessor to the Regulation) was intended to facilitate to the greatest possible extent, the free movement of judgments, by providing for a simple and rapid enforcement procedure. At paragraph 20 the court stated that it followed from its own case law that the procedure for enforcement constituted an autonomous and complete system independent of the legal systems of the Contracting States and that the principle of legal certainty in the community legal system and the objectives of the Convention required a uniform application in all Contracting States of the Convention rules and the relevant case law of the court. In that context, the court had held that the predecessor of Article 34.1 (Article 27.1) which referred to “the public policy in the State in which recognition is sought” had to be interpreted strictly, inasmuch as it constituted an obstacle to the attainment of one of the fundamental objectives of the Convention and that recourse to that provision could only be had in exceptional cases. Whilst it was not for the European court to define the content of the public policy of a Contracting State, it was nonetheless required to review the limits within which the courts of a Contracting State might have recourse to that concept for the purpose of refusing recognition to a judgment emanating from a court in another Contracting State. Paragraphs 35-40 of the decision constitute the key paragraphs for present purposes. The court held that, by disallowing any review of a foreign judgment as to substance (the predecessors to Article 36 of the Regulation) the Convention prohibited the court of the state in which enforcement was sought from refusing to recognise or enforce that judgment solely on the ground that there was a discrepancy between the legal rule applied by the court of the state of origin and that which would have been applied by the court of the state in which enforcement was sought, had it been seised of the dispute itself. Similarly, the court of the state in which enforcement was sought could not review the accuracy of the findings of law or fact made by the court of the state of origin.

[15]In paragraph 37 the court stated that:

“Recourse to the public policy clause … can be envisaged only where recognition or enforcement of the judgment delivered in another Contracting State would be at variance to an unacceptable degree with the legal order of the state in which enforcement is sought inasmuch as it infringes a fundamental principle. In order for the prohibition of any review of the foreign judgment as to its substance to be observed, the infringement would have to constitute a manifest breach of a rule of law regarded as essential in the legal order of the state in which enforcement is sought or of a right recognised as being fundamental within that legal order.”

[16]Given that the Regulation now provides that, for the exception to apply, enforcement or recognition must be “manifestly contrary to public policy”, (with the addition of the word “manifestly” to the wording of the provision in force prior to the year 2000), it is clear that the court can only refuse recognition or enforcement in exceptional cases where it is obvious that public policy dictates refusal, whether or not Mr Mercer is correct in saying that a “flagrant” breach of a fundamental right is required.

[17]In

Case C-38/98

, Renault SA v Maxicar SpA the court referred at paragraphs 29 and 30 to its prior decision in Krombach at paragraphs 36 and 37 and went on to say that an alleged error relating to rules of Community law did not alter the condition for being able to rely on the public policy exception to recognition or enforcement. At paragraph 33 the court said this:

“The court of the state in which enforcement is sought cannot, without undermining the aim of the Convention, refuse recognition of a decision emanating from another Contracting State solely on the ground that it considers that national or Community law was misapplied in that decision. On the contrary, it must be considered whether, in such cases, the system of legal remedies in each Contracting State, together with the preliminary ruling procedure provided for in Article 177 of the Treaty, affords a sufficient guarantee to individuals.”

[18]It can be seen that emphasis is there placed on the question whether the system of redress in the Contracting State in question makes adequate provision for remedying mistakes of national Community law or legal process.

[19]In 1991, Phillips J (as he then was) considered the interrelationship between remedies in the Contracting State where the judgment had been given and the issue of recognition or enforcement in another Contracting State. In Interdesco S.A. v Nullifire Ltd [1992] ILPR 97 he held that where registration of a judgment under the 1968 Convention, the precursor to the Regulation, was challenged on the ground that the foreign court was fraudulently deceived, the enforcing court should first consider whether a remedy lay in such a case in the foreign jurisdiction in question. If it did, it would normally be appropriate to leave the defendant to pursue his remedy in that jurisdiction because it accorded with the spirit of the Convention that all issues should, so far as possible, be dealt with by the courts with original jurisdiction and such courts were likely to be more capable of assessing whether the original judgment was procured by fraud. Moreover, an English court should not normally entertain a challenge to a Convention judgment in circumstances in which it would not permit a challenge to an English judgment on the basis of res judicata or issue estoppel although principles of estoppel should be applied with care and in a flexible manner in relation to foreign proceedings. i) At paragraph 35 Phillips J said: “In my judgment, where a foreign court has, in its judgment, ruled on precisely the matters that a defendant seeks to raise when challenging the judgment on the ground of fraud, the Convention precludes the court from reviewing the conclusions of the foreign court.” ii) At paragraphs 36-37, he grappled with the question of the approach the court should adopt where, in support of a case of judgment obtained by fraud, the defendants sought to raise a fresh case or rely on evidence which was not before the foreign court. After referring to comments in the official reports in the Convention, he went on to say that where registration of a Convention judgment was challenged on the ground that the foreign court had been fraudulently deceived, the English court should first consider whether a remedy lay in such case in the foreign jurisdiction in question, for the reasons set out above. iii) At paragraph 38, he referred to the Henderson v Henderson principle and stated that, if this or something similar was applicable in the original court, the English court should be cautious in entertaining a challenge to the foreign judgment.

[20]Whilst this decision specifically relates to the challenge to enforcement on the basis that the original judgment was obtained by fraud, the principles set out by the judge are self-evidently of wider application. If those principles apply in the context of an arguable case of a judgment obtained by fraud, they will apply to allegations of judicial bias and a fortiori to other arguments of a less serious nature in relation to the course which the proceedings took in the foreign jurisdiction. They must apply to arguments about procedural unfairness.

[21]Where the factors relied on as being contrary to public policy in England are factors which the court has already considered in the foreign jurisdiction or are factors which could have been raised by way of objection in that jurisdiction, it appears to me self-evident that the foreign jurisdiction must be treated as the best place for those arguments to be raised and determined. To do otherwise would be contrary to the spirit of the Convention and, where issues of unfairness are raised which are capable of being the subject of appeal in the foreign jurisdiction, the court in the enforcing jurisdiction would be much less able to assess them than the original court which was familiar with its own forms of procedure. It is plain that an enforcing court will have much more difficulty in understanding the overall foreign system and its procedures for ensuring that justice is done than the appeal court of the original jurisdiction itself. There is moreover a highly unattractive element in a defendant not raising points which he could have raised in the original jurisdiction, by way of appeal against the judgment and only seeking to raise those matters when the judgment is exported to an enforcing jurisdiction under the Convention as matters of public policy for that court.

[22]The final decision upon which counsel for Mr Huertas relied is that of the Court of Appeal in Maronier v Larmer

[2003] QB 620

. There, Lord Phillips MR, giving the judgment of the court, at paragraphs 24-27, referred to one of the fundamental objectives of the Convention as being to “facilitate, to the greatest extent possible, the free movement of judgments by providing for a simple and rapid enforcement procedure”. He then stated that the objective would be frustrated if the courts of an enforcing State could be required to carry out a detailed review of whether the procedures that resulted in the judgment had complied with Article 6. Court procedures differed from one State to another and courts should apply a strong presumption that the procedures of other signatories to the Convention were compliant with Article 6. This was not an irrebuttable presumption however and, in an exceptional case, where the procedure of the court first seised had resulted in a defendant being prevented from putting his case to the court, a refusal to enforce the resultant judgment on grounds of public policy in another Contracting State could be justified.

[23]The House of Lords in Porter v Magill

[2012] 2 AC 357

made reference to apparent bias. At paragraphs 102-103, Lord Hope set out the precise test to be applied, stating that the court must first ascertain all the circumstances which have a bearing on the suggestion that the judge was biased and must then ask itself whether those circumstances would lead a fair minded and informed observer to conclude there was a real possibility, or a real danger, the two being the same, that the tribunal was biased.

[24]Dr Smith relies on this dictum as also on the dictum in Adams v Cape Industries

[1990] 1 CH 433

at p. 568-569 where it is stated that a defendant who can show that a foreign judgment has been obtained by fraud is not obliged to have used any available remedy in the foreign court with reference to that fraud if he is successfully to impeach the judgment in the English courts. The existence and failure to exercise such a right by the defendants would not however be irrelevant. It would be anomalous if the English courts were obliged wholly to disregarding the existence of a perfectly good remedy under a foreign system of procedure in considering whether the defective operation of that procedure had led to a breach of natural justice. A court must have regard to the availability of such a remedy in deciding whether in the circumstances of any particular case substantial injustice had been proved. The relevance of the existence of the remedy and the weight to be attached to it depends upon factors which include the nature of the procedural defect itself, the point in the proceedings at which it occurred and the knowledge and the means of knowledge of the defendants of the defect and the reasonableness in the circumstances of requiring or expecting that they make use of the remedy in all the particular circumstances.

[25]These authorities must be read in the light of those which relate specifically to the Regulation itself and the enforcement of foreign judgments in this country with the limited exception provided by Article 34, in the light of the provisions of Article 36 of it.

[26]In order therefore to succeed in resisting enforcement of the APCA Judgment on grounds of public policy in this country, Dr Smith not only has to show an exceptional case of an infringement of a fundamental principle constituting a manifest breach of a rule of law regarded as essential in the legal order in this country or of a right recognised as being fundamental within it but that the system of legal remedies in France did not afford a sufficient guarantee of his rights. Dr Smith must overcome the strong presumption that the procedures of the courts of France, another Contracting State, are compliant with Article 6. As Professor Schlosser in paragraph 192 of his Report on the Convention upon accession of the UK said in the context of the question of obtaining judgments by fraud:

“A court in the State addressed must always, ask itself, whether a breach of its public policy still exists in view of the fact that proceedings for address can be, or could have been, lodged in the courts of the State of origin against the judgment allegedly obtained by fraud.”

[27]It therefore becomes important to consider not only what the French courts have actually decided in relation to the complaints Dr Smith now makes but also what redress or remedies were available to him in respect of such complaints had he chosen to make them there. In this context the applications he did and did not make to the Cour de Cassation and the European Court of Human Rights (ECtHR) are of significance.

CPR 24.1

[28]I need not recite the terms of this rule nor do anything other than refer to the decisions upon which Dr Smith relied for the principles which are so well known as to require no repetition. Reference was made to ED & F Mann Liquid Products Ltd v Patel [2003] AER (D) 75

[2003] EWHC Civ 342

at paragraph 9, Swain v Hillman [2001] 1 AER 91 at 92, Three Rivers v Bank of England

[2003] 2 AC 1

and Royal Brompton Hospital NHS Trust v Hammond (No. 5) [2001] 76 Con LR 62. The question is whether Dr Smith has a “real prospect” of succeeding on his claim where “real” is equivalent to “realistic” and is to be contrasted with fanciful, meaning lacking in substance. The court should not embark upon a mini trial on a summary judgment application and regard must be had therefore to the question whether there exist disputes of fact which can only be resolved at trial. Consideration must also be given to the possibility that future disclosure of documents might make a significant difference.

[29]There is only one area here where evidence at the trial could differ in any material respect from what is before the court now and where there are disputes of fact which could have a material bearing upon the court’s decision. These points arise in relation to the conduct of the hearing of the APCA on 13th February 2013 where Dr Smith and Ms Smithdale’s evidence is that the court was profoundly hostile to Dr Smith and did not give him a fair opportunity to present his case. Mr Mercer QC was prepared to accept that there were disputes of fact which arose in relation to that hearing but contended that it could make no difference to the issues the court has to decide because of the availability of remedies in France in respect of such complaints.

The complaints

[30]A number of points should be stated at the outset: i) Dr Smith was represented throughout the French proceedings by lawyers whose competence and integrity is not in question. ii) The French system provides for appeals, and challenges or redress on each of the grounds put forward by Dr Smith in this court. iii) Some complaints were pursued in France and failed whilst others were not pursued at all. iv) The Cour de Cassationand the ECtHR dismissed applications to it on grounds to which I shall come. v) The penal file which was before the APCA contained all the relevant documents showing the inter-company loan agreements - the French company’s loan to the English subsidiary and its credit line agreements with other subsidiaries. The APCA had all the other relevant material before it as presented by Dr Smith’s lawyers in opposition to the case being made by the Public Prosecutor and Mr Huertas as the administrator of the French company in liquidation. vi) Dr Smith had the opportunity to give evidence in the ordinary way in which the French system operates and did so, subject to the complaint that he makes about the conduct of the proceedings on 13th February 2013.

[31]In Dr Smith’s witness statements, his focus was on the date of the CDP and the court’s findings in that respect which he regards as erroneous. Not only were these findings fact findings which are beyond challenge here, but the date was not, as already set out, determinative of the issue as to whether or not he had committed the criminal offence of which he was convicted. Although he said in his second witness statement that he was “criminalised by the completely false date of Cessation de Paiements set by the Court of Appeal of Aix-en-Provence dated 26th October 2006” the reality is, as appears from the ACPA judgment of 26th March 2013, that not only did that court give its own reasoning as to the date of CDP, but it concluded that, regardless of that date, Dr Smith was guilty of the bankruptcy offence in question because of his knowledge and intention at the time of authorising the payments to the subsidiaries.

[32]Although allegations of dishonesty and corruption have been made against Mr Huertas and lawyers representing him, the key issue to which this court must have regard is the question of unfairness and breach of Dr Smith’s Article 6 rights in the APCA giving the judgment it did on 26th March 2013. Although, of course, the background and prior course of proceedings must be borne in mind, it is this judgment of that court and the process in that Court which matter, since that is the judgment which is the subject of potential recognition and enforcement.

[33]Although the various complaints made by Dr Smith are capable of being grouped according to type, I set out each, as pleaded and recorded in paragraph 11 of this judgment in order to examine their merits and the prospects of success on each, bearing in mind, as Mr Samek QC rightly submitted, that it is necessary to look at the proceedings as whole when considering the APCA Judgment.

Paragraph 68(a) of the Particulars of Claim– the duration of the investigation and the proceedings

[34]It is undoubtedly the case that the criminal investigation began in August 1999 and the proceedings themselves lasted from 2007 through to 26th March 2013, although Dr Smith had been convicted at first instance by the TCG on 9th July 2012. The evidence before me establishes that the French courts grappled with this point of extended duration on two occasions at the instance of Dr Smith and Ms Smithdale, on 21st February 2011 (TCG) and 26th March 2013 (APCA). They concluded that there was no unconstitutionality and no breach of Article 6.1 or 6.3 of the Convention nor of the preliminary article of the Code of Penal Procedure. The proceedings did not last an unreasonable length of time in the context of investigations in the liquidation, letters rogatory and other complexities. No suggestion is made of disadvantage to Dr Smith in the trial process by reason of delay – the only prejudice being the fact of proceedings hanging over him for such a time. The court concluded that, in any event, the excessive duration of an investigation or of the proceedings had no impact on the validity of the proceedings, only enabling a person affected to claim compensation from the French authorities.

[35]The self-same point was taken in an application to the ECtHR and was rejected by that court on 9th October 2014 together with the point raised in paragraph 68(b) to which I shall come in a moment. Notwithstanding the fact that the ECtHR did not spell out the criteria in Articles 34 and 35 of the Convention that had not been met, when declaring the appeal “inadmissible”, it is, as Mr Mercer submits, clear that the appeal could only have been dismissed because the court considered it “manifestly unfounded” or because it considered that Dr Smith had “not suffered a significant disadvantage” within the meaning of Article 35.3(a) or (b). The point has been decided against Dr Smith.

[36]On 3rd December 1999 Dr Smith was formally placed under investigation. Having attended interviews with the Nice police on 1st and 2nd December 1999, the JI asked him to attend interviews in November 2001 and February 2002 but, for medical reasons, duly certified by his doctor, he was unable to attend. Dr Smith complains that he made at least two requests to be interviewed thereafter including a request in 2007 which led to a refusal on the part of the second JI appointed in her ordinance dated 6th July 2007. As recorded in the pleading, Dr Smith appealed that decision to the Chambre d’Instruction of the APCA on 13th July 2007 but the appeal was dismissed on 17th September 2007. Reasons were given for this refusal and the expert evidence of French law establishes that the order referring the matter to the criminal court by the JI “purges” possible nullities during the investigation by reason of Article 179 of the Criminal Litigation Code. Dr Smith was able to communicate both with the examining magistrate during the entire investigation through his lawyers, was able to request and obtain a hearing for a witness designated by him and was able to explain himself fully before the TCG and APCA. He had the opportunity to speak and be represented both at the first instance trial and on appeal and once again, Dr Smith petitioned the ECtHR on this ground and his appeal was declared inadmissible.

[37]As with the first ground of complaint, it is clear that the French courts and the ECtHR have decided the very point upon which enforcement in this country is challenged. Dr Smith thus seeks to challenge the substance of those decisions.

[38]As can be seen from the POC, set out above in paragraph 11 of this judgment, the challenges raised here are all challenges to the substance of the decisions made in the French courts because the courts subsequently decided that the date of the CDP was 12th May 2008, that the French company had been deprived of interest on the £1.8 million loan and at first instance decided that there was evidence to support charge 3, although this was quashed in the APCA. The order to appear, issued by the JI, when he or she decides that sufficient evidence against the person under investigation exists, is, under the French system, capable of challenge before the criminal court to which the matter is referred. Dr Smith did contest the validity of this order before the Court of Appeal of Aix-en-Provence, without success. The date of the CDP was not only the subject of reasoned decision by the APCA but was also the subject of an appeal to the Cour de Cassation which was rejected as “non admis” by an order of that court dated 22nd January 2014 which, on the evidence of French law, means that, following a special appeal filtering procedure, it was rejected as “not founded on a serious ground” under Article 567-1-1 of the Criminal Litigation Code. The Cour de Cassation rejected the appeal on the basis that the date of the CDP was a question of fact and that it was not determinative in any event because, whether the actions taken by Dr Smith took place before or after the insolvency date, they were undertaken with the same intention and aim and their purpose or result was to affect the assets that would be available on insolvency, thus preventing the French company from paying its liabilities. Those findings of fact by APCA were not susceptible to appeal. The only point of law which was raised in front of the Cour de Cassation, was considered to have been already decided, namely that the group interest defence did not constitute an answer to a charge of misappropriation of funds in a liquidation.

[39]As appears from the decision of the APCA, a referral for committal for trial by the JI is challengeable. Ms Smithdale made such a challenge which was rejected. Such an application was open to Dr Smith and was made by him in the TCG. It is apparent therefore that there is nothing in this ground of complaint at all and that Dr Smith could not complain of any prejudice or significant disadvantage in referral to the court on any of the charges in question, which were all examined by APCA and determined on the basis of the evidence before it. A challenge to its findings is inadmissible by reason of

Article 36 of the Convention

[40]Counsel for Dr Smith waxed eloquent on this point but it is hard to see, despite the serious allegations made against Mr Huertas, how this can assist in resisting enforcement of the judgment. The APCA knew what the position was and referred in its judgment to the faxed letter of 29th August 2008 from Mr Huertas to Mr Adams (a co-defendant who was acquitted by the TCG) in which it was stated that the French company had received the sum of £468,457 from its English subsidiary by way of distribution on the liquidation of the latter company. It is alleged that Mr Huertas concealed this from the TCG which gave judgment for a compensatory payment to be made by Dr Smith without giving credit for this sum. The fact of partial repayment was pleaded in the APCA by Dr Smith and Mr Huertas’ contention that the sum paid to the French company was simply a distribution to the parent company and not therefore a repayment of the loan did not find favour with the court. The judgment of the court therefore fully took account of this payment although it did not state whether Mr Huertas had been dishonest in seeking to conceal the matter from the lower court.

[41]The evidence of French law is that, any fraud on the part of Mr Huertas would not nullify or negate the APCA judgment. Mr Samek QC, relying on the French law expert consulted by Dr Smith, submits that the whole proceedings may have been tainted by this dishonesty with the result that the court found that Dr Smith had the necessary mens rea for the offence which it might not otherwise have done. This is not only far fetched (since the two elements have no connection) but requires review of the foreign judgment as to its substance in order to make the point good. The fact that the APCA did not, in its judgment, criticise Mr Huertas for any deliberate concealment on his part cannot be prayed in aid to show unfairness in the result it reached.

[42]A criminal complaint has now been launched, this month, by Dr Smith against Mr Huertas in respect of the alleged deliberate concealment of the payment. Should that succeed, it is agreed between the French law experts, Dr Smith would recover damages. It is also clear on the evidence that in France there is a remedy available via the Commission de Révision if new evidence emerges to show that a judgment has been obtained by fraud but in the present case, for the reasons already given, it is clear that the APCA corrected the decision of the TCG which had failed to take account of the relevant payment.

[43]It is now said that Mr Huertas has lied to this court in giving an explanation for Mr Adams being told of the payment in 2008 but not Dr Smith. It is also said that he has lied in relation to his failure and that of his lawyers to put the true figures before the TCG. Even if that is the case, I cannot see that this would give rise to an issue of public policy for the purpose of deciding whether or not to enforce the judgment of APCA, which was the court where the issue had first arisen about repayment.

[44]Whilst it seems to me of no real relevance, it is highly surprising that the GTC was not aware of the payment since Mr Adams knew of it and was at that stage a defendant in the first instance proceedings. Moreover the payments by the English company were a matter of public record as could be seen from the accounts of the English subsidiaries which had been in Companies House since 2000. It is said that neither Dr Smith nor his lawyers thought to check the accuracy of the figures being put forward by Mr Huertas and that any failure on their part to do so does not excuse the latter for his concealment of the true facts from the court. It may be that, as he argued before the APCA, once the point was in the open, that he considered the payment to be irrelevant because he did not see it as a repayment of the loan. Whatever disputes of fact might arise on this however, cannot in my judgment, impact on the enforceability of the judgment where the true figures were taken into account and Dr Smith was given credit for the receipt by the French parent company of the sum in question.

Paragraph 68(e) of the Particulars of Claim – the proceedings were tainted for other reasons

[45]Much the same applies in relation to the complaint that Mr Huertas communicated with the co-accused Mr Adams and that Mr Huertas’ attorney had sought Mr Adams help to find a work placement for his son in England. The issue here is not what the lawyers did but whether the APCA judgment can be challenged on public policy grounds. The criticism made is that the APCA ought to have dismissed the charges and partie civile proceedings against Dr Smith but the French law evidence does not support that proposition and it was obviously a matter for the French court to determine what should and should not be done. There could be no unfairness to Dr Smith in taking account of the sum paid and whatever took place as between Mr Huertas’ lawyer and Mr Adams who had in fact assisted Mr Huertas in the liquidation of the company, there is no basis upon which the decision of the court with regard to Dr Smith’s guilt can be challenged by reason of Article 36. Even if the case against Mr Adams was not prosecuted strongly, whether as a result of any corruption or otherwise, it is not suggested that the acquittal of Mr Adams by the TCG could have resulted in an adverse judgment of the APCA in relation to Dr Smith who became president of the French company on 2nd April 1998.

Paragraph 68(f)- the conduct of 13th February 2013 APCA hearing

(f) - the conduct of 13th February 2013 APCA hearing

[46]There are issues of fact between the parties as to what took place at the hearing which led to the APCA judgment of 26th March 2013. There is no transcript of the proceedings available. No notes of the proceedings from any of the lawyers nor from Dr Smith nor Ms Smithdale have been produced to the court. The greffier (the court clerk) produced a court log which was made available to me by the parties on the date of the application. This shows the presence of the public prosecutor, Dr Smith’s two lawyers, Ms Smithdale’s lawyer and Mr Huertas’ two lawyers. The log records that both Mr Smith and Ms Smithdale were heard through Valérie Aymard, an English interpreter. The expected start time was 2pm with an expected duration of 2 hours. The log shows that proceedings concluded at 8.15 in the evening with arguments and pleadings filed by the lawyers for Mr Huertas with submissions from the public prosecutor and the presentation of argument and pleadings from the lawyers for Dr Smith and Ms Smithdale, who had the last word.

[47]The evidence of Dr Smith and Ms Smithdale is essentially pleaded at paragraph 68(d) of the POC as set out in paragraph 11 of this judgment, save that there is reference to three hours being taken up by lawyers for the defendants and creditors, to time being taken by the Public Prosecutor and to one or both hearings together lasting less than 5 hours.

[48]Althoughthere is no evidence from the French lawyers who represented Dr Smith or Ms Smithdale at the 13th February 2013 hearing in relation to the complaints made by Dr Smith, there is evidence before the court from Maître Lopresti, the lawyer who represented Mr Huertas. He pointed out that, at any hearing in France, if any party believes that a member of the court is guilty in any way of judicial misconduct, he can raise the point at the hearing and require it to be recorded in the court log. This would apply both to inadequacy of translation or unfair treatment by the court itself.

[49]In his witness statement, he said that Dr Smith’s report of the hearing in his witness statement is inaccurate and that the Court of Appeal was respectful of the rights of the defence. He states that both Dr Smith and Ms Smithdale were able to explain everything that they thought useful, that Dr Smith was provided with the opportunity to make his arguments at every stage of the proceedings and that there was an interpreter and a transcriber at each hearing. He stated that it is a principle of criminal justice in France that no legal representative of any party can be interrupted by a judge and any legal representative can speak for as long as he or she wishes. He points to the absence of any contemporaneous complaint of the kind now raised or any request to the transcriber to make a note of any procedural failings by the court.Maître Lopresti does not accept that it was impossible for Dr Smith to communicate his defence to the court or that the judge had so much personal dislike for him that she kept talking over him and shouting at him and states that he has no recollection of the court acting in the way that Dr Smith has stated.

[50]The evidence before this court is that if a complaint is to be made to a higher court in France about a breach of Article 6, about unfairness, apparent bias, actual bias or hostility shown by the court or incompetence of an interpreter, the point must be raised at the time and noted by the greffier in the court log. Dr Smith was represented by competent lawyers throughout who made no such complaint at the time and there is no notation, as would be required in the court log, for the point to be pursued elsewhere.

[51]Even if the points pleaded at paragraph 68(f)(i)-(v) are taken at face value without question, there was a remedy available to Dr Smith in pursuing such matters to the Cour de Cassation. Yet the only application made to the Cour de Cassation, although raising a violation of

Article 6 of the ECHR

and Article 1 of Protocol 1 thereto, related to issues concerning the CDP and the state of mind of Dr Smith at the time of committing the offence of which he had been found guilty and the “group interest” defence which did raise a matter of law. As already indicated, the Cour de Cassation refused the appeal on a summary basis. Dr Smith could however have launched an appeal based on the very matters which he raises in this court as public policy grounds for refusing enforcement.

[52]Similarly, these points could have been taken on an application to the European Court of Human Rights but were not. The points raised there, as set out earlier in this judgment, related to the duration of the investigation and the proceedings and the failure/refusal of the JI to interview Dr Smith. Article 6 was raised in this regard and, in passing, the complaint stated that “it should be noted that during the hearing Richard Smith, who speaks only English, had major problems understanding the questions put to him and the proceedings in general, despite the presence of a translator.” The ECtHR dismissed the allegation as manifestly ill founded or as not giving rise to a significant disadvantage to Dr Smith.

[53]In my judgment this is a pre-eminent example of the type of complaints that ought to have been pursued in France first and then in the ECtHR if they were of any substance. Whilst it is an area which could give rise to disputes of fact as to what actually took place, the court best able to determine whether there was unfairness or bias would undoubtedly have been the Cour de Cassation with presentations from French lawyers versed in the procedures of the French system. It is noteworthy that there is no evidence from Dr Smith’s French lawyers who were present at the time as to the matters of which Dr Smith complains and differences of culture and unfamiliarity with a local court’s proceedings may well give rise to feelings of unease on the part of a litigant when the procedure is, in fact, little out of the ordinary to those who are familiar with it, and not in any way unfair to the participants.

[54]Given the well known feature of the French courts in proceeding more on documents than on oral presentation, the limited time made available on the appeal cannot be seen as evidence of bias; nor can the inference be drawn from the handing down of a copy of a letter sent by Dr Smith to the French Minister of Justice complaining about the process to which he had been subject. The handing down of such a letter is capable of giving rise to any number of inferences including the inference that the court wished Dr Smith to know that they were conscious of his grievances and the need for care in dealing with his appeal.

[55]If Dr Smith’s French lawyers made no complaint at the course of proceedings and no appeals were pursued in relation thereto, this court cannot conclude that there was such unfairness as to vitiate the judgment of the APCA.

[56]Any such complaints of unfairness should have been pursued before the Cour de Cassation or ECtHR if they were to be pursued at all, along with the applications that were actually made. In the circumstances Dr Smith cannot properly reserve his position and seek to make those points good in this country and successfully rely on public policy grounds to challenge the APCA Judgment.

Paragraph 68(g), (h), (i)

(g) , (h), (i)

[57]All of these complaints as set out in the pleadings at paragraph 11 of this judgment fall foul of the terms of Article 36 and the prohibition on review of the substance of a foreign judgment when enforcement is being considered. Whether or not Mr Samek QC actually conceded the point which I understood him to do, there is simply no room for this court to examine the matters complained of.

Proposed amendments to paragraph 68(j) of the Particulars of Claim

(j) of the Particulars of Claim

[58]The new grounds of complaint arise from the second report of the expert French lawyer instructed by Dr Smith and relate to the period of Dr Smith’s custody on 1st and 2nd December 2008. The complaints are that Dr Smith was not notified of his right to remain silent, was not notified of his right not to incriminate himself, was denied the right to be assisted by a lawyer of his choice during the first period of police questioning and was required to swear an oath that he would tell the truth during that questioning. All these are said to be breaches of Article 6 and authority is cited in support. It is also said that six hours of police interviews produced a mere 7 pages of minutes detailing his responses.

[59]These grounds were capable of being raised on an appeal to the Chambre d’instruction but were not pursued at all, despite Dr Smith raising the point with that court as to the refusal by the JI to interview him. Once the order of referral to the criminal court was made however any such defects in procedure were purged and the court had to proceed on the basis of the evidence put before it. There is no prejudice alleged in relation to the course of the court proceedings by reference to any of these matters. Dr Smith made no admission or concession to the police and takes no point as to anything that he did say in those interviews being held against him. The points are completely without consequence. Whatever breaches of Article 6 may have taken place in the light of decided authority, they had no impact at all and are not suggested to have done so in the context of the APCA judgment.

Paragraph 69 of the Particulars of Claim – Bias

[60]It is contended that the GTC and/or APCA were guilty of actual or apparent bias towards Dr Smith in the criminal and partie civile proceedings. The primary ground relied on is represented by the facts and matters set out in paragraph 68(f) to which I have already referred, namely the conduct of the APCA hearing on 13th February 2013. For the reasons already given, these points should have been taken in French courts and/the ECtHR if they were of any substance. The inference of bias is not in my judgment sustainable in the context of a public policy argument against enforcement of a judgment when no such applications have been pursued in the courts where they fell appropriately to be made.

Paragraph 69(b), (c) and (d)of the Particulars of Claim

(b) , (c) and (d)of the Particulars of Claim

[61]These repeat paragraphs 68(g), (h) and (i), all of which fall foul of Article 36 of the Regulation, as set out above.

Paragraph 69(e) – Mr Adams’ acquittal

(e) – Mr Adams’ acquittal

[62]No proper inference of bias can be drawn from this and the complaint again falls foul of Article 36 of the Regulation.

Paragraph 69(f) – the TGC conviction on charge 3

(f) – the TGC conviction on charge 3

[63]As the APCA overturned the conviction of Dr Smith and Ms Smithdale on charge 3 relating to the furniture, with all the material available in the penal file on the point, there can be no public policy ground for refusal to enforce the APCA judgment.

Paragraph 69(g) – the increase of Dr Smith’s sentence

(g) – the increase of Dr Smith’s sentence

[64]The French law evidence establishes that an appellate court can increase the sentence of the trial court if the public prosecutor appeals as was the case with Dr Smith. Article 132-19 of the Criminal Code directs sentencing by reference to the gravity of the offence and “the personality (character) of its author”. The APCA judgment specifically set out the court’s view that the circumstances and character of the accused justified a more severe sentence than that imposed by the first instance judges. Any review of that would fall foul of Article 36 of the Regulation. The fact that Dr Smith was acquitted of charge 3 in the appeal court and the value of the unrecovered loan which was the subject of charge 1 had been reduced does not in any event cause any eyebrows to be raised or an increase in sentence since there was a conviction on charge 2 (deprivation of interest on the loan) and the court was entitled to reconsider the gravity of the offence and the character of the accused.

[65]The rejection of that application took place on 21st December 2011 but it was the TCG to which the application was made, not the APCA and it was that court which refused to refer the constitutional question to the cour de cassation. In reality this point differs little from the Article 6 unfairness point to which I have already referred in this judgment.

Conclusion

[66]In truth, the only area of disputed fact relates to the events of 13th February 2013 at the APCA hearing. Elsewhere, wherever there are conflicts as between the French law experts, the differences are immaterial for anything that I need to decide.So also, as it seems to me, are any issues relating the 13th February 2013 hearing because English public policy cannot be prayed in aidin respect of matters of the kind set out in Dr Smith and Ms Smithdale’s witness statements where such matters could and properly should have been pursued in Franceand/or the ECtHR rather than raising the point at the enforcement stage only. When regard is had to the French system as a whole, it cannot be said that its provisions were insufficient to protect the defendant from any manifest breach of his right to defend himself. The allegations concerned do not give rise to an infringement of Dr Smith’s rights at variance to an unacceptable degree with the legal order of England and Wales where enforcement is sought. It cannot be said that enforcement of the APCA Judgment is manifestly contrary to public policy on the basis of the evidence adduced by Dr Smith in circumstances where he launched no appeal on the basis of his complaint and his lawyers required no notation of any such complaints in the court log on 13th February 2013.

[67]For the reasons given earlier in this judgment, none of the other grounds even arguably raise matters where evidence at trial could differ from the evidence before me. It follows that I consider Dr Smith’s prospects of success as fanciful and that there is nothing which could emerge before or at a trial which would give rise to any compelling reason why there should be such a trial. No disclosure or evidence could take Dr Smith’s case any further forward than it currently is.

[68]In consequence judgment should be entered for Mr Huertas against Dr Smith both on Dr Smith’s claim and Mr Huertas’ own counterclaim and a declaration made that the APCA judgment of 26th March 2013 and the supplemental judgment of 8th October 2013 (on which no particular issue arises) are recognised and enforceable in the English courts.

[69]Costs must, it appears to me, follow the event but if there are any special circumstances of which I am unaware and/or an order cannot be agreed, I will hear further submissions.